Recent estimates suggest that approximately 7 million U.S. children under age 18 live in homes with at least one alcoholic parent. Examination of demographic trends in combination with prevalence data indicate that alcohol abuse and alcoholism among parents in the 35 to 49 age group will be a rapidly growing problem into the mid-1990's. The potential health consequences for children of parental alcohol abuse and alcoholism are obviously serious. A 1986 Office of Technology Assessment Report stresses the harmful effect of alcohol abuse in impairing parents' abilities to care for their children and observes that parental alcoholism is one of the most-common hazards to children's mental health. While much research has examined the effects of alcohol use on the health of the drinker, or in the case of pregnant drinkers, on the health of their newborns, much less is known about the effects of parents' alcohol use on the health of their children. While evidence suggests that these children are at risk to experience reduced levels of physical and mental health, sophisticated studies of large data bases have yet to be used to address this question. Recent economic studies of the relationship between parental characteristics and child health have applied more powerful methodologies to large bodies of survey data. This proposed project will use the household production framework of these economic studies to explore the impacts of parental alcohol use on children's health levels. Empirical analyses will be based in part on the 1988 National Health Interview Survey (NHIS) data which are unique in providing extensive detail about both parental alcohol use and children's (physical and mental) health levels. Additional supplementary analyses will be carried out with the 1983 and 1985 NHIS data. Child health impacts will be estimated for both past and current parental use; variations in impacts for children at different ages and different socioeconomic groups will also be examined. In addition to estimating structural production functions, estimates of input demand and health demand functions will also be obtained; these estimates-provide information about the consequences for child health of policy initiatives (e.g., increasing excise tax rates) aimed at reducing parental alcohol abuse. Results of the analyses will help to identify the types of families in which children are at the highest risk of suffering adverse health consequences and where reductions in parental consumption have the greatest positive child health impact.